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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. The

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Speaker 1: topic now is energy. In Vienna, OPEC a tentatively agreeing

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Speaker 1: on an oil output cut that was something on the agenda,

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Speaker 1: but we're still waiting to hear from non OPEC members

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Speaker 1: such as Russia before deciding what kind of volume in

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Speaker 1: production reduction will actually take place. Here to tell us

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Speaker 1: more from Vienna is Jason Schenker. He is the president

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Speaker 1: of Prestige Economics and the chairman of the Futurist Institute. Jason,

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Speaker 1: we've all been waiting for a press conference that apparently

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Speaker 1: is not going to happen. Yeah, that's right, Tim. I'm

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Speaker 1: sitting right now in the press conference room in Vienna.

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Speaker 1: There were a few hundred people here up until about

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Speaker 1: ten minutes ago when the story broke that there was

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Speaker 1: not going to be a press conference. The room is

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Speaker 1: mostly emptied out. Now it's maybe about only hundred people left,

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Speaker 1: and uh, you know, folks are a little bit concerned,

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Speaker 1: but it looks like lock the wait for tomorrow to

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Speaker 1: see what happens if OPEC and non OPEC members, specifically

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Speaker 1: Russia can come to an agreement on what happens with

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Speaker 1: the production cuts for the year ahead. So, Jason, this

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Speaker 1: actually is highly unusual for them to cancel a press conference.

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Speaker 1: Does it indicate to you that there's more disagreement than

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Speaker 1: usual on how much to cut production or even if

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Speaker 1: they should cut it all? Well, I think what it

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Speaker 1: really indicates is that the stakes are higher, and I

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Speaker 1: think anyone you know, we look at what's going on

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Speaker 1: across markets today and what's been going up for the

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Speaker 1: last two months. Uh, you know, we see there's a

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Speaker 1: lot of altimities. There's concerned about the U. S. China

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Speaker 1: trade war and what's going on. What does that mean

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Speaker 1: for risk in It's been really important for industrial medals,

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Speaker 1: which have been crushed all year. Oil prices have taken

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Speaker 1: a big hit after the driving season. UM equity markets

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Speaker 1: highly voluntal on this, and then of course there's still

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Speaker 1: interest rate tightening, not just in the US but everywhere

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Speaker 1: higher cross the capital. What's that going to do. There's

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Speaker 1: a risk of a campex recession in business investment in

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Speaker 1: the US, there's a risk of a Chinese manufacturing recession.

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Speaker 1: In these things are big risks on OPEX plate, and

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Speaker 1: I think that OPEC and not PICK members want to

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Speaker 1: make sure they get it right because the risks in

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Speaker 1: the stakes couldn't be higher. Jason the Russian Energy Minister

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Speaker 1: Alexander Novak, he went from Vienna back to St. Petersburg

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Speaker 1: to talk to President Vladimir Putin. He's now scheduled to

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Speaker 1: return to Vienna on Friday. What to the Russians one, Well,

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Speaker 1: I think it's really you know, there's concern about the

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Speaker 1: market going into an oversupplied situation. What happened in late

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Speaker 1: through the middle of oil inventories globally rose sharply, and

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Speaker 1: part of that was China, the biggest net importer in

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Speaker 1: the world of crude oil, the biggest source of additional

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Speaker 1: future marginal crude oil demand, was in a manufacturing recession.

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Speaker 1: China is on an edge of the manufacturing recession right now.

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Speaker 1: If it goes into one, and OPEC and non IMPEC

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Speaker 1: members specifically if Russia and OPEC can't agree on how

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Speaker 1: much to reduce, then the price of oil to get

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Speaker 1: backed really hard. And so I think there's you know,

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Speaker 1: potential to want to air on the side of more

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Speaker 1: tightening rather than left. And that means, you know, there

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Speaker 1: might need to be special approvals involved because they can't

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Speaker 1: get this wrong, because if they do, with inventories go

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Speaker 1: up a lot, more oil prances could get hammered. What's

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Speaker 1: the price that they would like to see. I'm looking

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Speaker 1: right now a crude on the IMAX hitting that fifty

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Speaker 1: a barrel target are almost almost they're almost lowest levels

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Speaker 1: in more than a year. What do they want, Well,

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Speaker 1: I think that the most you know, I I would

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Speaker 1: probably say sixty dollars are above. But they don't explicitly

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Speaker 1: target an oil price. What they try to target, what

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Speaker 1: they have targeted for the last two years with the

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Speaker 1: OPEC mon OPEC agreement is the five year average inventory level.

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Speaker 1: That inventory is built up massively above that through the

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Speaker 1: early part of and they've run down this year. We've

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Speaker 1: been below globally that five year average of oil inventory stocks,

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Speaker 1: and so OPEC wants to keep it below that. We're

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Speaker 1: at that five year inventory average. That's what they're really

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Speaker 1: trying to target, because they know if they can keep

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Speaker 1: it at that level, even if demand weakens, it will

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Speaker 1: support prices. And while they might like sixty dollars a

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Speaker 1: barrel with the prize very worried about, is it's a

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Speaker 1: forty again Mason. One of the things the Russians have

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Speaker 1: said is that it is more challenging for them to

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Speaker 1: cut oil output in the winter than other producers because

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Speaker 1: of the cold weather. Does this mean that they're going

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Speaker 1: to have to wait until after winter and after the

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Speaker 1: Europeans use all of that Russian natural gas? Well, I'd

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Speaker 1: say there's a couple of things on this, and you know,

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Speaker 1: I don't think it. I mean, they can structure wind

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Speaker 1: cuts happen, how cuts happen. You know, those are things

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Speaker 1: that can be worked out. But I think as long

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Speaker 1: as the members are, you know, kind of of a

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Speaker 1: singular mind to rain and supply, that's going to be

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Speaker 1: the thing. But I think no one country wants to

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Speaker 1: bear the entire brunt of it, and I think that

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Speaker 1: the members also want to see it kind of spread around.

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Speaker 1: I think, particularly Saudi Arabia wants to make sure that

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Speaker 1: these are numbers that everybody's going to play with, and

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Speaker 1: they're not the only country to pull back supply, and

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Speaker 1: I think Russia wants to make sure that it too

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Speaker 1: isn't the only one to reduce supply, because all everyone

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Speaker 1: would like to benefit from potentially more supported or higher prices,

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Speaker 1: not every you know, no country wants to pay the

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Speaker 1: full right, right, Jason Schanker, thank you so much for

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Speaker 1: being with us there from Vienna, where you are observing

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Speaker 1: the undertakings at OPEC's latest meeting. Jason Shanker, President of

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Speaker 1: a Prestige Economics, also chairman of the Futurist Institute, normally

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Speaker 1: based in Austin, but over in Vienna. Canadian authorities in

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Speaker 1: Vancouver have arrested Huawei Technologies chief financial officer at the

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Speaker 1: request of the United States, for alleged violations of Iran sanctions.

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Speaker 1: Here to help us understand the situation is Wu jin Ho.

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Speaker 1: He is technology analyst for Bloomberg Intelligence and also joining

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Speaker 1: us as Michael McKee, international Economics and Policy correspondent for Bloomberg.

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Speaker 1: Michael McKee, let's just begin. The chief financial officer of

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Speaker 1: Huawei Technologies is not an ordinary employee. Is she no

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Speaker 1: she's not. She's the daughter of the founder. And this

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Speaker 1: is also one of China's biggest companies, and it is

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Speaker 1: one of the companies that China is relying on in

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Speaker 1: the Made in China program to dominate the world's uh

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Speaker 1: leading technologies of the future. So this has enormous implications.

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Speaker 1: It may have been something completely separate from the president's

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Speaker 1: overtures to Shi Jinping down in Buenos Aires, but it

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Speaker 1: was the same day, so it could possibly be a

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Speaker 1: message from the President to the Chinese. But it's definitely

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Speaker 1: going to complicate the trade efforts that the administration is making.

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Speaker 1: You have to expect the Chinese may have some sort

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Speaker 1: of retaliatory move ahead. Just to be very clear, though,

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Speaker 1: this is being prosecuted out of the Eastern District of

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Speaker 1: New York, So this is a federal prosecutatorial office that

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Speaker 1: is somewhat remove from the president in the day to

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Speaker 1: day terms. And Cannada Canada did cooperate here. Come on

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Speaker 1: here at wujin Ho. What do we know about the

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Speaker 1: actual allegations and then can you talk about what the

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Speaker 1: programming in the software and some of the some of

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Speaker 1: the actual technology behind this is why it's such a

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Speaker 1: security concern. Sure, So UM from a from the allegations

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Speaker 1: standpoint is still fairly thin because the documents are sealed

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Speaker 1: right now, So we really don't know why she's being

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Speaker 1: arrested in Canada. Alway do know is that she was

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Speaker 1: arrested on December one, and then she's being asked to

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Speaker 1: the US is asking her to be extradited in back

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Speaker 1: to the U s UH for some sort of charge.

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Speaker 1: Right now, the timing of it, to your point is

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Speaker 1: is a little bit rough, primarily because of the trade

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Speaker 1: agreements between Trump and E G. Ping. So UM, I

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Speaker 1: think there's a timing element to it, um, but from

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Speaker 1: from from a trade perspective, still unclear, quite frankly, right, Um,

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Speaker 1: In terms of UM, you know Whahwei and what Wahwei provides.

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Speaker 1: Wahwei provides the actual network equipment that helps drive our

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Speaker 1: UM wireless networks. So if you look at the Chinese

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Speaker 1: wi uh wireless markets, some of the European wireless markets,

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Speaker 1: they use a lot of the Wahwei equipment. UM. And

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Speaker 1: if you think about how we have digital networks, a

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Speaker 1: lot of the digital networks can you can actually peer

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Speaker 1: into the packets itself and see what's being said and

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Speaker 1: then you know, an eavesdrop into the communication. So there

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Speaker 1: is a security concern element and that's one of the

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Speaker 1: reasons why the US government has banned Wahwei equipment um

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Speaker 1: for their use. And the other element of that is

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Speaker 1: a Wahwei is the second largest first or second largest

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Speaker 1: smartphone provider as well, and that was also banned UH

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Speaker 1: into or uh discourage from being sold in the US.

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Speaker 1: So there there are security elements on both fronts, on

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Speaker 1: the equipment side as well as on on the smartphone side. Now, Michael,

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Speaker 1: the chief financial officers you were describing of Huawei, Sabrina Mang,

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Speaker 1: was arrested during a layover flight in Canada. The allegations

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Speaker 1: have to do with an ongoing criminal investigation into Huawei,

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Speaker 1: which started I think it was back in the spring.

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Speaker 1: What exactly do you believe the government I mean, has

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Speaker 1: to do with dealings with the Iran. What is there

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Speaker 1: any subtext here based on the trade dispute. Well, the

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Speaker 1: subtext would be that the US is cracking down on

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Speaker 1: China for a lot of things. This is not directly

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Speaker 1: related to trade with the US, but it is an

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Speaker 1: allegation that the Huawei helped evade US sanctions on Iran.

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Speaker 1: Huawei has a defense arguing that the regulations are unclear

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Speaker 1: and that um they didn't necessarily violate the US law.

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Speaker 1: That'll have we argued out. But while it's not directly

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Speaker 1: related to the trade dispute, it does complicate matters because

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Speaker 1: it is part of an effort, along with remember the

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Speaker 1: Zte case, uh the US to crack down on these

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Speaker 1: companies in China that it sees as threats. Now, it's

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Speaker 1: not to say they did or didn't do something wrong.

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Speaker 1: I'm not the judge, but there are credible allegations they

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Speaker 1: did something wrong. But it does seem to be a

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Speaker 1: coordinated effort on the part of the administration to go

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Speaker 1: after companies deliberately because they are competitors to the U

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Speaker 1: s they are a threat to the US and if

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Speaker 1: they're getting there by breaking the law, then they should

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Speaker 1: be prosecuted. Come on in here, because one thing that

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Speaker 1: I'm struck by is how isolated is Huawei, which is

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Speaker 1: a huge company in China, one of the most important,

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Speaker 1: if not the most important companies there. How much business

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Speaker 1: does it do with US companies and US suppliers. Sure

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Speaker 1: so in terms of the equipment perspective. What we calculated

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Speaker 1: was that Wahwei provides five billion, five billion with a

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Speaker 1: B dollars of equipment in terms of network equipment from

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Speaker 1: optical wireless infrastructure, so on and so forth. Right, that's

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Speaker 1: different from z t E. Z t E is still

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Speaker 1: a fairly domestic Chinese market. The US doesn't buy Chinese

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Speaker 1: equipment for the most part, so it's mostly UM, Western Europe, Latan,

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Speaker 1: austral Australia, Japan, and South Korea. UM. But there are

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Speaker 1: broader implications for the suppliers. If we look at what

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Speaker 1: we published today, UM, there Wahwei is the number one

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Speaker 1: optical equipment supplier. And what we can see from the

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Speaker 1: SPLC function on Bloomberg is that Momentum Neo Photonics provides

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Speaker 1: about generates their sales from from Huahwei, and there are

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Speaker 1: a host of others UH providers UM that provides temper

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Speaker 1: sent or or or more on sales. Now we're not

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Speaker 1: there yet, right. The z t E ban UM, you know,

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Speaker 1: show that it can cripple the US supply band Camp,

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Speaker 1: cripple STPLAI, but we're not there yet. Jho technology analyst

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Speaker 1: for Bloomberg Intelligence and Mike McKee, international economics and policy

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Speaker 1: correspondent for bloomber Both of you, thank you so much.

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Speaker 1: A lot to figure out, a lot unknown as of yet,

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Speaker 1: so we will continue to dig into it as new

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Speaker 1: information arises. Real estate, commercial real estate, multi family realist state.

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Speaker 1: We've got an expert, Gerald Gutterman. Jerry Gutterman is the

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Speaker 1: senior principal partner and chief investment officer for Government Partners.

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Speaker 1: They are based in New York and he joins us now.

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Speaker 1: Jerry Gutterman, thank you very much for being with us.

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Speaker 1: Let's begin right off the bat by. When you see

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Speaker 1: a day like today in the stock market and the

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Speaker 1: bond market, what's your reaction. Of course, I would rather

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Speaker 1: the market be going up, But it doesn't really affect

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Speaker 1: the real estate as an investment on a daily basis,

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Speaker 1: because the real estate continues to work, the tenants continued

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Speaker 1: to pay rent, and they're really not affected by this.

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Speaker 1: We understand that four O one case can be affected,

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Speaker 1: but the daily living of the average tenant is not affected.

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Speaker 1: But Jerry, fair enough, fair enough. Although some people would

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Speaker 1: interpret what we're seeing, certainly in bond and stock markets

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Speaker 1: as a signal that growth is slowing, substantially around the world,

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Speaker 1: including the US. We're seeing inflation expectations dropping the most

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Speaker 1: more than a year today. I'm just wondering, how does

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Speaker 1: that play into the housing market, given the fact that

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Speaker 1: the last time we spoke, you said that you foresee

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Speaker 1: an implosion in high end condos coming. Yes, because I've

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Speaker 1: seen this now three different times. I saw it in

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Speaker 1: nine seven, I saw it in two thousand six two

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Speaker 1: thousand even, and then two thousand fourteen, two thousand sixteen,

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Speaker 1: now been seeing it, and in seven to night. Of course,

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Speaker 1: the real estate market had the same exact things happened

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Speaker 1: to it. It wasn't a matter of the stock market,

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Speaker 1: and I realized that in seven we had a big

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Speaker 1: problem with the stock market, and we had that one

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Speaker 1: day crashed. But on the other hand, the big problem

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Speaker 1: and the big reason that the real estate market weakened

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Speaker 1: was because of overbuilding, constantly, constantly overbuilding, because if you

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Speaker 1: give a normal and usual builder a mortgage, he will

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Speaker 1: build in the desert. And consequently, by nine eighty seven night,

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Speaker 1: the over building and the over capacity was such that

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Speaker 1: we saw it coming, and the pricing for it at

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Speaker 1: that point because they were building so much, but they

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Speaker 1: were building into with demand where the price of the

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Speaker 1: product kept going up and up and up to where

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Speaker 1: the return kept going down. The return went down to five,

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Speaker 1: then below five. It reminds me of today we had

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Speaker 1: the same thing happened that we saw in two thousand

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Speaker 1: and six, two thousand and seven. We saw it happening

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Speaker 1: in two thousand and eight. We sold everything between two

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Speaker 1: thousand and six and two thousand and seven, just like

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Speaker 1: we sold everything between seven and Alright, Jerry, advantage of it.

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Speaker 1: We get it makes sense what you're saying in the

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Speaker 1: high end condom market. I'm wondering does that sort of

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Speaker 1: carry over to the rest of the housing market, especially

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Speaker 1: in light of sensibly rising rates, although now they're going

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Speaker 1: back down. You know, we specialize. We really have not

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Speaker 1: been doing new homes. We've been doing more conversions, that is,

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Speaker 1: buying rental properties and converting them to condominium ownership. Because

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Speaker 1: when we do that, what we find is we can

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Speaker 1: buy the product better cheaper, and we can actually sell

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Speaker 1: it significantly cheaper. And when you realize, when you finally

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Speaker 1: realize that if you buy an existing rental property, that

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Speaker 1: tenant in possession is your partner. If you're going to

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Speaker 1: do a condominium conversion. That is, you're going to convert

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Speaker 1: the condominium ownership. Well, what is your partner want? Your

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Speaker 1: partner wants to buy it almost as cheaply as you did.

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Speaker 1: And the answer is, we believe that every tenant in

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Speaker 1: possession is a partner, and we give the tenants in

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Speaker 1: possession a significant price reduction. How do we do that?

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Speaker 1: We do that because we're able to take advantage of

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Speaker 1: the market as it is now. Starting now, because it's

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Speaker 1: already started several months ago, the prices have been dropping

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Speaker 1: significantly in the areas where there has been extreme over building.

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Speaker 1: For instance, if I go to Florida and I pick

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Speaker 1: a city like Sunny Isles Beach, which most people know,

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Speaker 1: if you have a non luxury apartment that is going condominium,

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Speaker 1: I would tell you today that there's about thirty two

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Speaker 1: months of supply right now. That means it's going to

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Speaker 1: take thirty two months to sell what is normally sold

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Speaker 1: in one year. If you go to the luxury market,

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Speaker 1: it's fifty five and a half months of supply. Can

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Speaker 1: you imagine fifty five and a half months, that's four

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Speaker 1: and a half years of supply on an average sale

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Speaker 1: per year basis, Well, the builders can't hold out, and

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Speaker 1: what's the only thing they can do. They have to

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Speaker 1: be able to sell and get out. The builders can't

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Speaker 1: sell at steep discounts. It's not possible. And the reason

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Speaker 1: is the banks who have made them the loans will

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Speaker 1: not allow the builders to sell at a discounted price.

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Speaker 1: The reason is because if the bank allows the builder

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Speaker 1: to sell at a discounted price, then the auditors are

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Speaker 1: going to come in and they're going to drop all

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Speaker 1: of the value for their mortgages that they have by

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Speaker 1: at least that amount, and they're going to take their collateral.

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Speaker 1: The banks collateral will only be worth a certain amount

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Speaker 1: less if they dropped the price. Can you imagine the

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Speaker 1: order is coming in and dropping the collateral by or

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Speaker 1: or and that's what happens, Gerald, Jared. Let me let

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Speaker 1: me ask you one question having to do with the

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Speaker 1: non professional or the non experienced, the unexperienced real estate

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Speaker 1: investor who have put billions of dollars into real estate projects.

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Speaker 1: Is this going to be the time when they try

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Speaker 1: to rush for the exits. If it is an investor

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Speaker 1: who invested in the last year or two and the

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Speaker 1: project was purchased at a price as it was priced

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Speaker 1: over the last year or two. The answer is yes,

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Speaker 1: and that's why we're so busy now, because we pick

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Speaker 1: these times to keep coming back in when the market

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Speaker 1: can be discounted significantly, and when we buy now it's

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Speaker 1: common knowledge um in the market that we buy anything

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Speaker 1: from fifty to discount. Jerry Gutterman, thank you so much

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Speaker 1: for being with us. Uh and Uh, well, we'll see

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Speaker 1: whether those discounts will only get steeper from here. So

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Speaker 1: I'm sure you have a busy few months out of you.

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Speaker 1: Jerry Gutterman, Senior principal partner in chief investment officer at

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Speaker 1: Gotterman Partners LLLC in New York. It's interesting for him

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Speaker 1: as we talk about trade tensions and some of the

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Speaker 1: turmoil in the tech sector, how does one go about

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Speaker 1: identifying opportunities among emerging tech companies with big data and

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Speaker 1: artificial intelligence against this backdrop? And joining us from Tel Aviv,

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Speaker 1: Israel to talk about this is Brock Rabinowitz, managing partner

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Speaker 1: at F two Capital. Brock, wonderful to have you, especially

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Speaker 1: on a day like this where the trade tensions are highlighted.

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Speaker 1: How much does that backdrop color your view of how

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Speaker 1: to invest in emerging tech sectors. Yeah, it's great to

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Speaker 1: be here. UM. You know, we're ten year vehicles in

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Speaker 1: UH in venture capital funds generally. And I was just

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Speaker 1: in the US and I heard from you know, family

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Speaker 1: offices and large institutional investors who are spread in the

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Speaker 1: equity market is dead markets and also a bit in

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Speaker 1: private equity and VC. They're actually moving more money to

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Speaker 1: VC now because of that, because nobody knows what to

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Speaker 1: make out of all this volatility. VC being venture capital, yes, ye,

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Speaker 1: venture capital UM, transforming markets, transforming the world. UH. They

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Speaker 1: still believe in tech despite the volatility, and VC is

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Speaker 1: an attractive way to do it UM. And at the

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Speaker 1: same time, all the big tech giants are sitting on

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Speaker 1: hundreds of billions of dollars in cash, so people can

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Speaker 1: see the exit activity will continue and it's about finding

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Speaker 1: value in different locations around the world. Barack, can you

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Speaker 1: just give us a little background on F two capital,

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Speaker 1: because I believe what a spin out out of Genesis Partners,

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Speaker 1: you and two others deciding to go out on your own,

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Speaker 1: and you managed to also take something called the Junction

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Speaker 1: with you. This is an accelerator program explain how it works. Sure,

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Speaker 1: I'd be happy to pim so. Genesis Partners was one

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Speaker 1: of the original venture capital funds formed in Israel when

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Speaker 1: the industry started about twenty five years ago. It we

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Speaker 1: had six fifty million dollars under management across four funds.

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Speaker 1: And what we saw in Israel generally is the changing

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Speaker 1: of the guard. At the time Genesis started, it was

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Speaker 1: very much a buyer's market, those with the cash where kings.

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Speaker 1: But what's happened over time is more and more strategic

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Speaker 1: players moving to Israel and start buying up companies. Is

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Speaker 1: power has shifted to the entrepreneurs, so the founders have

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Speaker 1: the power. It's now a seller's market and vcs to

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Speaker 1: be successful have to give more than cash UH in

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Speaker 1: order to secure the top deals. In our way of

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Speaker 1: doing that at F two Capital, F two is powered

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Speaker 1: to founders UH in this spirit is through our platform

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Speaker 1: called the Junction. The Junction is a network that we've

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Speaker 1: created of multinationals including sap Unich, re Kuley, Packard and

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Speaker 1: others largest players in the world who are looking to

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Speaker 1: Israel for technology edge UH, and we leverage them as

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Speaker 1: a way to stand out in the market and support

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Speaker 1: founders and attract them to our program. So, Brock, I'm

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Speaker 1: wondering if you could look into the crystal ball and

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Speaker 1: tell us what the cutting edge technology is currently being

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Speaker 1: developed that you think will change the world. Everybody is

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Speaker 1: talking about artificial intelligence, and it's just different ways to

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Speaker 1: apply that. Artificial intelligence In Israel, Uh, it all comes

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Speaker 1: out of the military. Israel has always been at a

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Speaker 1: numerical disadvantage to our neighbors in a hostile region. We've

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Speaker 1: relied on artificial intelligence from the you know, basically the

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Speaker 1: the the uh initial days of of of computers. Well,

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Speaker 1: but how is it going to be applied in a

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Speaker 1: cutting edge way that's going to sort of transform the

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Speaker 1: way we think about things. It's it's gonna be applied

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Speaker 1: in stages so um. You know, for example, enterprises are

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Speaker 1: sitting on tons of data. They're drowning in data. They

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Speaker 1: don't know how to make sense of all the data.

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Speaker 1: So you can apply machine learning to comb through the data,

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Speaker 1: enrich it with other data you can get off the

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Speaker 1: web in order to create predictive models to tell you

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Speaker 1: how much, uh to pay for your next house. Uh.

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Speaker 1: We're equally which drug is going to be effective to

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Speaker 1: cure cancer. UH. In other realms, in real estate, we see,

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Speaker 1: for example, UH, the use of bots who can service

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Speaker 1: hundreds of clients compared to a regular agent who can

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Speaker 1: serve dozens at a time, and they do that through

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Speaker 1: artificial intelligence. So I think it will be a matter

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Speaker 1: of enhancing human capabilities, UH using computing power. Now, according

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Speaker 1: to the reports, you get pitches from let's say two

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Speaker 1: hundred and fifty applicants, and you select five companies and

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Speaker 1: they enter a six month boot camp program. You give

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Speaker 1: them a hundred thousand dollars in funding on a convertible note,

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Speaker 1: and then you get an option to invest more. Some

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Speaker 1: of the companies are Regulus X of firewall, anti virus

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Speaker 1: solution for drones and so on. But you say you

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Speaker 1: want to develop sophisticated insurance technology. Tell us about why

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Speaker 1: you don't want to go business to consumer. You want

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Speaker 1: to go business to business. You know. I always feel

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Speaker 1: that entrepreneurs they need to do things where they have

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Speaker 1: an advantage. And Israel is so far removed from the

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Speaker 1: big consumer markets, for example, the US, that we're really

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Speaker 1: going to be at a disadvantage to startups in New

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Speaker 1: York or California. Uh. Instead if we can work behind

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Speaker 1: the scenes, powering enterprises to do their jobs better, that's

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Speaker 1: really a sweet spot that we found, uh. And that's

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Speaker 1: what the multinationals like Google, Facebook, Apple, they all have

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Speaker 1: their R and D centers outside the US and Israel,

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Speaker 1: but more recently the Chinese Ali Baba and some of

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Speaker 1: the other big names have come here. Uh, And that's

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Speaker 1: why we chose to focus our program on these kind

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Speaker 1: of enterprise deep technologies. Brock Who's ahead when it comes

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Speaker 1: to tech advancement US or China? I think the the

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Speaker 1: US will always be ahead when it comes to creativity,

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Speaker 1: and that means that US will always be ahead. China

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Speaker 1: has always been good at copying. Where you see them

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Speaker 1: ahead is more in I would say, new forms of

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Speaker 1: payment technology or you know, specific areas, But I have

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Speaker 1: long term confidence in the US. Tell us just quickly

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Speaker 1: about frontier technology when it comes to augmented reality products.

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Speaker 1: How could they be used in business? And what are

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Speaker 1: you doing to support that. Three D printers for examp

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Speaker 1: and pull or cloud based quality assurance testing. Yeah, I'll

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Speaker 1: tell you. I mean you mentioned three D printers. Three

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Speaker 1: D printers you know gets into the realm of additive manufacturing.

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Speaker 1: And I'm actually born and raised in Ohio and Youngstown,

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Speaker 1: Ohio and the rust Belt, and we've done a partnership recently.

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Speaker 1: Alongside the big names I mentioned, we also have a

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Speaker 1: partnership with the Youngstown Business Incubator, which is looking to

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Speaker 1: Israeli tech and additive manufacturing as a way to stimulate

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Speaker 1: jobs UH in an economically depressed part of the nation

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Speaker 1: by embracing added manufacturing and restoring manufacturing power to the

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Speaker 1: rust belt. UM. But you know you mentioned augmented reality

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00:27:37,560 --> 00:27:40,800
Speaker 1: as well. Same thing. We're seeing huge disruptions as people

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Speaker 1: adopt artificial intelligence. You've probably heard the statistics a lot

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Speaker 1: of people are going to be unemployed. Well, if you

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Speaker 1: could use augmented reality, for example, in classes, UH and

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Speaker 1: give that to people who would otherwise be laid off

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Speaker 1: and send them back into the field as service personnel

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Speaker 1: getting the training they need in real time in the

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Speaker 1: direction they need a real time UH to fix problems. UH.

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Speaker 1: It's it's a really impactful way of both generating profits

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Speaker 1: UH and a social impact. Thanks very much for being

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Speaker 1: with us. Barak Rabinowitz is the managing partner of F

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Speaker 1: two Capital based in Tel Aviv. Speaking about artificial intelligence

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Speaker 1: and venture capital incubators. Thanks for listening to the Bloomberg

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Speaker 1: P and L podcast. You can subscribe and listen to

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00:28:27,119 --> 00:28:31,639
Speaker 1: interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer.

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Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm

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00:28:35,640 --> 00:28:39,040
Speaker 1: on Twitter at Lisa abramowits one before the podcast. You

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00:28:39,080 --> 00:28:41,600
Speaker 1: can always catch us worldwide on Bloomberg Radio